Home stake Mining Company is a 120-year-old international gold mining company with substantial gold mining operations and exploration in the United States, Canada, and Australia. At year-end, Home stake reported the following items related to income taxes (thousands of dollars).
Total current taxes $ 26,349
Total deferred taxes (39,436)
Total income and mining taxes (the provision for taxes per its income statement) (13,087)
Deferred tax liabilities $303,050
Deferred tax assets, net of valuation allowance of $207,175 95,275
Net deferred tax liability $207,775
Note 6: The classification of deferred tax assets and liabilities is based on the related asset or liability creating the deferred tax. Deferred taxes not related to a specific asset or liability are classified based on the estimated period of reversal.
Tax loss carry forwards (U.S., Canada, Australia, and Chile) $71,151
Tax credits carry forwards $12,007
Instructions
(a) What is the significance of Homes take's disclosure of "Current taxes" of $26,349 and "Deferred taxes" of $(39,436)?
(b) Explain the concept behind Homes take's disclosure of gross deferred tax liabilities (future taxable amounts) and gross deferred tax assets (future deductible amounts).
(c) Homes take reported tax loss carry forwards of $71,151 and tax credit carry forwards of $12,007. How do the carry back and carry forward provisions affect the reporting of deferred tax assets and deferred tax liabilities?